Acknowledging the Inevitable: Long Term Care

Acknowledging the Inevitable

It is unrealistic to believe that "I'm not going to need long-term care; or, if I do, then my kids will take care of me."

“No one plans for a loved one to experience a long-term care event or caregiving for an aging relative just as no one plans for a pandemic," said Marguerita Cheng, CEO of Blue Ocean Global Wealth Management.  It is unrealistic to believe that "I'm not going to need any care or, if I do, then my kids will take care of me." - it's not that simple,

The Cost of Assisted Living is Rising

The cost of assisted living is rising, making it increasingly difficult for seniors and their families to finance long-term care. 

With the cost of assisted living averaging around $4,500 a month in some states, many seniors are turning to alternative options for financing. 

In 2021, the national median cost of a home health aide was $5,148 per month, and the national median cost of a private room in a nursing home was $9,034 per month. (Source: msn.com)

Paying for Assisted Living

The following provides excellent information on "paying for Long-Term Care": "Paying for Long-Term Care."  National Institute on Aging. Paying for Long-Term Care | National Institute on Aging (nih.gov) 

Government Sponsored Programs

Medicare: While Medicare is a lifeline for many retirees, it does not cover most assisted living costs.  

Medicaid. Medicaid may pay for some assisted living.  However, you have to spend down all your assets before it kicks in and requires a detailed application process.  How Can Medicare and Medicaid Help Cover Long-Term Care? | Medicare & Medicare Advantage Info, Help and Enrollment

(non-government resource)

Veteran Benefits.  ChooseVA  Paying for Long Term Care - Geriatrics and Extended Care (va.gov)

Federal Long Term Care Insurance Program (FLTCIP).   For federal employees and their families.

Insurance with Long Term Care Rider

Medicare Advantage: Medicare Advantage plans may help cover some custodial care costs.  

Long Term Care Insurance

Annual premiums for long-term care policies are expensive.  Average annual premiums for a $165,000 long-term care policy in 2022 (less than 3 years long term facility cost):  (Source: American Association for Long-Term Care Insurance)

Typical Annual Premium:

    $1,700 for a healthy 65-year-old male

    $2,700 for a healthy 65-year-old female

    $3,750 for a healthy 65-year-old couple

Premiums for long-term care insurance policies are not guaranteed and may experience significant rate increase.   "It is wise to compare the cumulative cost of a policy against the future costs of care." (Quoted from: money.com). Qualifying for long-term care insurance gets increasingly difficult and premiums get progressively higher with age.   

Life Insurance Policy with built-in long-term care benefits 

Important to calculate the value of your Life Insurance Policy.  

Self-Insuring

- Self-insuring with a retirement plan, savings account

- Pension. 

- Annuity with Long-term Care Rider.  Annuities have a defined "lock-in period" (typically 3-7 years) but may allow 10% withdrawal per year without penalty. 

- Trust Fund.  Assure that your Family Trust outlines long-term care financing. 

Using Your Home Value

Home equity conversion mortgages (Reverse Mortgage). 

Applying proceeds from sale of your home. 

Aging in Place

"Growing Older at Home".  National Institute on Aging.  Aging in Place: Growing Older at Home | National Institute on Aging (nih.gov)


Call to Action: Starting the Process

Assess your assets and expenses.  The best time to think about long-term care is BEFORE you need a lot of care.

With your family, assess your long-term care options.  Select an option that works best for you. 

Update your Living Will to reflect your long-term care wishes.   

Start the process of downsizing.  Keep personal items that keep the new home homey. 


An Essential Part of Your Retirement and Financial Plan

Preparing for long-term care is an essential part of your retirement and financial plan.

                                                Photo: L. Cook.  Pinos Creek, Colorado.


RESOURCES THAT MIGHT BE HELPFUL...

Paying for Long-Term Care.  National Institute on Aging. Paying for Long-Term Care | National Institute on Aging (nih.gov) 

How Can Medicare and Medicaid Help Cover Long-Term Care?  medicare.gov  How Can Medicare and Medicaid Help Cover Long-Term Care? | Medicare & Medicare Advantage Info, Help and Enrollment

How to Finance Assisted Living.  Joanne Kaldy.  How to Finance Assisted Living (msn.com)

Alternatives to Long-Term Care Insurance | Money.  Nicole Valentine.  Alternatives to Long-Term Care Insurance | Money (msn.com)   (Note: excellent article)

Is Long-Term Care Insurance Worth It? | Money.  Dhruv Trivedi. Money.com  Is Long-Term Care Insurance Worth It? | Money (msn.com)

Aging in Place: Growing Older at Home.  National Institute on Aging.  Aging in Place: Growing Older at Home | National Institute on Aging (nih.gov)

For Family Members: Moving to assisted living checklist: Where to start, what to keep, and everything in between.  Haines Eason.  Moving to assisted living checklist: Where to start, what to keep, and everything in between (msn.com)


SO...What'd I miss??

Feel free to add your comments: What is your plan for "Long Term Care"?

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